New Hosts Fill Companies’ Need for Meeting Space

Chris Kelly, left, and Ryan Simonetti, Convene’s founders, bought and renovated space given up by other companies.Credit
Sasha Maslov for The New York Times

Commercial tenants have found themselves in a quandary in the last few years thanks to the make-do-with-less downturn. Some companies have shed underused office space in an effort to cut costs, but many of those same companies still require comfortable, high-tech rooms for large events like employee orientations, brainstorming sessions and shareholder meetings.

Capitalizing on both trends, Convene, a rapidly growing four-year-old firm that plans and hosts corporate events, may have hit upon a solution, at a time when the corporate event industry is trying to reinvent itself.

Convene snaps up cast-aside space, spends millions to improve it by adding wide video screens and brightly colored furniture, then rents it out for daytime get-togethers, occasionally to the same companies that shed the space in the first place.

This month, Convene cut the ribbon on a 36,000-square-foot site at 32 Old Slip in the financial district of Manhattan. Spread across the second floor of a 36-story, 1.1 million-square-foot office building owned by Beacon Capital Partners, the location is Convene’s third, joining two others in Midtown.

Today, after a $4 million renovation, the Old Slip space offers a dozen rooms of different sizes, from a 212-seat classroom-style auditorium to a narrow passageway with orange couches, where, it is hoped, conference attendees will curl up with laptops.

The unrenovated second-floor space seemed awkward for many potential tenants. Served by an escalator, and open, it had limited appeal for companies looking for conventional layouts. Retailers might not have liked how high it sits above the sidewalk.

Still, Philip J. Brannigan Jr., a Beacon managing director, said Convene was ideal for several reasons, among them that it might benefit the building’s other tenants, which include banks, construction management firms and insurance companies.

“Tenants these days want to optimize their space, and by having an amenity like this in the building, it helps them to do that,” Mr. Brannigan said.

In contrast to the often-banal hotel ballrooms that have been the industry’s bread and butter for decades, Convene’s facilities seem strikingly different. In the kitchen, a display case marked “Nourish” offers copies of Wallpaper magazine and blue potato chips. Stools tuck under skinny counters embedded with electrical sockets. Panels of opaque painted glass, gray fabric and wood line halls throughout.

For about $250 a head, the most typical package offers attendees a breakfast, lunch and two snacks, with an emphasis on healthy low-sodium, high-protein food. Included as well are hot and cold drinks, including antioxidant teas; cocktails are extra. There is usually no extra fee for use of the Wi-Fi network, projectors and microphones. The rate is comparable to the $225 to $270 per person charged for similar amenities at the Roosevelt Hotel in Midtown, a longtime, popular location.

“Our mind-set is more young tech company than stodgy hospitality firm,” said Chris Kelly, 30, a Convene co-founder, during a tour. Joining him was the other founder, Ryan Simonetti, 31, a friend from their undergraduate days at Villanova. There they were fraternity brothers and entrepreneurs, selling discarded textbooks online and holding parties at clubs in Philadelphia, where $25 covered admission and a bus ride from the suburbs and back.

“We were the guys who were always scraping for beer money and everything else,” said Mr. Simonetti, who went on to work for what is now Gramercy Property Trust, the investment firm affiliated with the commercial landlord S. L. Green Realty.

Originally known as Sentry Centers, Convene began in 2009 at 730 Third Avenue, a 46,300-square-foot multifloor site that the landlord, the financial management organization TIAA-CREF, had used for its own events. TIAA-CREF is now one of Convene’s clients, accounting for about 10 percent of its business at that site, Mr. Kelly said.

In 2011, Convene opened a second location, which encompasses 23,600 square feet at 810 Seventh Avenue, in a space that once played host to conferences organized by KPMG, the accounting firm. KPMG is now a client at the building, which is owned by S. L. Green. Other clients have included Apple, Google, Merck, Aetna and Goldman Sachs.

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At all three sites, rents are “slightly below market because of our unique ability to take challenged floors,” said Mr. Kelly, who added that Convene, which has 92 full-time employees, is profitable.

Asking rents at 32 Old Slip are about $40 a square foot, says Bruce Surry, a CBRE broker who markets the building. Asking Midtown rents average $65 a foot.

For Stephen Fried, a publisher of the Great Places Directory, which lists event locations in New York and other cities, the industry is still bouncing back from the recession. But Mr. Fried, who has worked for the company for a decade, said that the offerings were becoming more varied.

Options now include bowling alleys, town homes and even houses of worship, like the 60,000-square-foot Third Church of Christ, Scientist, at 583 Park Avenue. “Companies are thinking, ‘Let’s change it up and do things a little differently,’ ” Mr. Fried said. “It’s all evolving.”

But the upstarts may have their work cut out for them. Although little data is available, analysts say that properties operated by Hyatt, Sheraton and Marriott, as well as places like the Roosevelt Hotel, which opened in 1924, still dominate the corporate event industry in New York.

“Convene has caused us to think about how we do things,” said Kevin Croke, the marketing director at the Roosevelt, which is at 45 East 45th Street near Grand Central Terminal.

On a typical day, the hotel’s 30,000 square feet of space, with Tiffany chandeliers and architectural flourishes, welcomes 1,500 people. And many of those users are from banks like JPMorgan Chase, Morgan Stanley and UBS, Mr. Croke said.

Aside from Convene’s facilities, other less traditional spaces being rented for corporate events include Offsite, a three-level space carved out of a former pharmacy at 52 West 39th Street, as well as theaters and university facilities.

Offsite, which is whimsically decorated with flowery vinyl wallpaper and neon upholstery, opened last summer and aims for corporate clients of a more creative stripe, like L’Oréal and NBC, said Shaun Kessler, a co-owner.

Rental of the 4,200-square-foot space for a full day, which includes coffee and snacks, is $5,000, Mr. Kessler said. “You go into most of these hotel rooms, and they have beige walls and gray carpets, and very little service. You’re meant to fend for yourself,” he added.

At Liberty Theater, which opened in 2011 at 234 West 42nd Street in Times Square, about 30 percent of its revenue comes from banks and similar companies looking for an alternative to their own offices, even for short periods. William Curran, the 20,000-square-foot theater’s events director, said that one company recently leased the space for a 1,000-person event that lasted just 45 minutes, to announce that a president was stepping down.

“Companies are operating leaner, true, but people still need to have these events,” Mr. Curran said. “They’re not expendable.”

Since opening in 2003, the Kimmel Center at New York University has consistently rented out four of its 10 floors for conferences. Its popularity in part prompted the school to add similar space at a building next door, the Global Center, which opened at 238 Thompson Street last year. Its events, such as science festivals, tend to be held by nonprofits rather than corporate clients, said Jonathan Ross, the operations director. The center has three videoconferencing rooms, so overseas tie-ins are possible, and high-definition projectors will be installed.

“We have an obligation to keep everything looking fresh,” Mr. Ross said. “But it’s also a little, ‘If you build it, they will come.’ ”

Correction: May 1, 2013

An article in the Square Feet pages last Wednesday about Convene, a firm that rents out space for corporate events, described TIAA-CREF incorrectly. It is a financial management organization, not a pension fund.

A version of this article appears in print on April 24, 2013, on Page B8 of the New York edition with the headline: New Hosts Fill Companies’ Need for Meeting Space. Order Reprints|Today's Paper|Subscribe